The new face of retail / Mimicked Main Streets, mall makeovers seek to lure shoppers

Pia Sarkar, Chronicle Staff Writer

Published 4:00 am, Tuesday, May 3, 2005

Photo: PAUL CHINN

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Shoppers cross a street at the Santa Row shopping district on 4/26/05 in San Jose, CA. In an effort to change the shopping experience, developers are setting up �lifestyle� centers, like Santana Row, which try to mimic your average Main Street, with tree-lined sidewalks and chain stores that look like boutiques. Meanwhile, malls like Valley Fair across the street are trying to stay relevant, undergoing makeovers to seem more modern and inviting.
PAUL CHINN/The Chronicle MANDATORY CREDIT FOR PHOTOG AND S.F. CHRONICLE/ - MAGS OUT less

lifestyle28_031_pc.jpg
Shoppers cross a street at the Santa Row shopping district on 4/26/05 in San Jose, CA. In an effort to change the shopping experience, developers are setting up �lifestyle� centers, ... more

Photo: PAUL CHINN

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Lisa Hays and her triplets Jacob, Griffin and Sierra wash up in the new family restroom at Valley Fair shopping mall on 4/26/05 in San Jose, CA. The bathroom features a microwave to heat baby bottles. In an effort to change the shopping experience, developers are setting up �lifestyle� centers, like Santana Row, which try to mimic your average Main Street, with tree-lined sidewalks and chain stores that look like boutiques. Meanwhile, malls like Valley Fair across the street are trying to stay relevant, undergoing makeovers to seem more modern and inviting.
PAUL CHINN/The Chronicle MANDATORY CREDIT FOR PHOTOG AND S.F. CHRONICLE/ - MAGS OUT less

lifestyle28_097_pc.jpg
Lisa Hays and her triplets Jacob, Griffin and Sierra wash up in the new family restroom at Valley Fair shopping mall on 4/26/05 in San Jose, CA. The bathroom features a microwave to heat ... more

Photo: PAUL CHINN

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lifestyle28_065_pc.jpg
With a recent expansion, Valley Fair now has over one million square feet of retail space. Valley Fair shopping mall on 4/26/05 in San Jose, CA. In an effort to change the shopping experience, developers are setting up �lifestyle� centers, like Santana Row, which try to mimic your average Main Street, with tree-lined sidewalks and chain stores that look like boutiques. Meanwhile, malls like Valley Fair across the street are trying to stay relevant, undergoing makeovers to seem more modern and inviting.
PAUL CHINN/The Chronicle MANDATORY CREDIT FOR PHOTOG AND S.F. CHRONICLE/ - MAGS OUT less

lifestyle28_065_pc.jpg
With a recent expansion, Valley Fair now has over one million square feet of retail space. Valley Fair shopping mall on 4/26/05 in San Jose, CA. In an effort to change the shopping ... more

Photo: PAUL CHINN

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The new face of retail / Mimicked Main Streets, mall makeovers seek to lure shoppers

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Main Street never looked this good.

With perfectly manicured shrubbery, plenty of free parking and no panhandlers, real estate developers have come up with a way to take the best elements of a traditional Main Street and fuse them with retail. The result: a lifestyle center.

Lifestyle centers have been springing up in largely affluent regions, mimicking Main Street with tree-lined sidewalks and old-fashioned lampposts but stripping it of all its nuisances.

At the same time, lifestyle centers are making up ground that shopping malls have lost in recent years. Besides containing many of the same retail chains found inside a typical mall, they also offer movie theaters, sit-down restaurants and outdoor cafes, giving shoppers a reason to relax and stay awhile.

"We think the open-air environment creates a better shopping area than an enclosed mall," said Jeff Berkes, senior vice president and chief investment officer for Federal Realty Investment Trust, which in 2002 constructed San Jose's Santana Row, one of a small batch of lifestyle centers in the Bay Area.

Santana Row contains 95 specialty shops and restaurants, including upscale chains such as Diesel, Burberry and Gucci. The buildings are painted in earth tones and pastels, with wrought-iron balconies decorating housing units on the third floor.

Plazas and fountains give the space a European feel. Outdoor heat lamps ward off the chill for people who want to linger late into the evening. On Sundays, Santana Row hosts a farmers' market, a tool to keep shoppers coming back on the weekends.

"I don't know why they make malls in California when you have at least 300 days where you can enjoy the weather," said Nan Baumert, 47, of Sunnyvale, who had just finished her workout at Club One in Santana Row on a recent sunny afternoon.

Baumert said she comes to Santana Row about four or five times a week to use the health club, but sometimes she stops by for wine tastings and the farmers' market on the weekends. These options are not available to her at the mall, where she says she feels too confined.

"They can't do this inside, no matter how hard they try," Baumert said of mall developers.

Some critics frown at the lack of authenticity of lifestyle centers, with their made-up street names and prepackaged environs. Santana Row, for instance, purposely stretches 1,500 feet long -- equivalent to three or four city blocks -- in an attempt to create an ideal distance for a nice stroll but not too long a walk, according to Berkes.

John Landis, chairman of the city regional planning department at UC Berkeley, said many people like the feeling of being in the middle of a downtown. "It creates a sense of place in areas that didn't have it," he said.

But at the same time, Landis observed that lifestyle centers do not accurately reflect the economic realities of a real downtown. The average household income of a lifestyle center shopper, for instance, is $75,000.

"These aren't going to be as economically integrated as a regular downtown," he said.

Keeping malls fresh

Across the street from Santana Row is Westfield Shoppingtown Valley Fair, a mall that has no trouble attracting customers. Cars fill the parking lots on the perimeter. Inside, conversations echo off the mall's high ceilings. Air conditioning cools the place to a comfortable temperature. The sounds of smooth jazz drift out of one store while bass-pumping techno spills out of another, creating a disjointed concert through the mall's shared corridors.

Mothers push strollers along the sleek floors, balancing shopping bags on each handle. Teenagers -- a noticeably missing demographic from Santana Row -- gather at Valley Fair in small packs. One girl could be seen coaching her friend to run down the up escalator.

Lynne Rice, marketing director for Valley Fair, said the mall, which houses 270 stores, constantly updates itself to keep in line with customer needs and tastes. It has undergone two separate makeovers, in 2001 and 2002, adding more than 100 specialty stores, a new food court and a Nordstrom, giving Valley Fair 1.5 million square feet of retail space.

The mall has installed a play area for children, along with family restrooms, nursing stations, microwave ovens and bottle warmers. It also introduced a shopping concierge program in October 2003, similar to what one might find in a hotel. Services include valet parking, transportation arrangements and dining reservations.

Striving for relevancy

Malls across the country have taken similar measures to stay relevant to the shopper, a monumental task in the fickle world of retail.

Candace Corlett, a principal at WSL Strategic Retail, a consulting firm in New York, said she remembers when customers were dazzled by the gargantuan Mall of America when it opened in Bloomington, Minn., a decade ago.

"Now it looks ordinary," Corlett said. "Shoppers just keep upping the ante. The new gets old very quickly."

Malls still outnumber lifestyle centers nationwide by a large margin -- 1,130 to 130. Patrice Duker, a spokeswoman for the International Council of Shopping Centers, said the mall has firmly cemented its place in society. "It's certainly not going to go away anytime soon," she said.

But unlike malls, lifestyle centers have been growing at a rapid pace, in part because they are smaller and less expensive to maintain. Lifestyle centers measure between 150,000 and 500,000 square feet, versus malls, which measure about 800,000 square feet.

There have been 101 lifestyle centers built since 2002, according to the International Council of Shopping Centers. By contrast, only seven malls have been built in the same period.

"The fact is that branded stores are looking for new locations and there aren't new malls opening up as quickly as they once were," said Anita Kramer, director of retail development for the Urban Land Institute, a nonprofit research and education organization in Washington. Although retail chains continue to locate in malls, lifestyle centers provide them with a different opportunity, Kramer added.

A survey of both lifestyle centers and malls in the International Council of Shopping Centers' quarterly winter report for 2003-2004 noted that a lifestyle center has median sales of $298 per square foot, while a mall has median sales of $242 per square foot, a disparity attributed to lower sales productivity in the department stores that often anchor malls.

Lifestyle centers are not as reliant on department stores. Instead, they contain a mix of large stores such as sporting goods, home furnishings, bookstores and family apparel.

With the introduction of lifestyle centers, malls have been trying harder to stay fresh, although Kramer said that they should not feel threatened by lifestyle centers. "Lifestyle is competition but not a threat," she said.

"The strong malls will remain strong, and the competition means both parties will be watching each other."

Valley Fair's Rice said she does not see Santana Row as undermining Valley Fair's customer base, but rather sharing it. "Between Valley Fair and Santana Row, we've become a shopping destination in San Jose," she said.

Berkes of Federal Realty Investment Trust agrees that the two can coexist, but each offers the customer a different shopping experience. "Clearly, we believe in our experience," Berkes said.

Santana Row

Address: 355 Santana Row, San Jose

Construction completed: 2002

Developer: Federal Realty Investment Trust

Retail space: 558,000 square feet

Stores and restaurants: 95.

Westfield Shoppingtown Valley Fair

Address: 2855 Stevens Creek Blvd., San Jose

Construction completed: 1986

Developer: Westfield Group

Retail space: 1.5 million square feet

Stores and restaurants: 270

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